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Abstract
Crop marketing, and
specifically the efficiency of
markets, is a topic of much
interest and debate in the
agricultural industry. This case
study examines the effectiveness
of a marketing advisory service
(MAS) in pricing hard red
winter wheat in Kansas. The
post-harvest recommendations
of this particular MAS followed
by a wheat producer in
northwest Kansas over a 32-
year time period were
analyzed. Results indicate that
the net price received following
the MAS's recommendations
were statistically no better than
simply selling at harvest given
commercial storage costs and
bank interest rates. With lower
storage costs, the MAS did
receive a premium of 13¢ per
bushel compared to harvest
sales. A cash marketer storing
and selling grain at the same
time as the MAS marketer, but
without forward contracting,
would have been 10¢ per
bushel worse off than the MAS
marketer. This MAS gain was
due to its ability to secure a
stronger basis level and pick up
short term price movement
gains. However, these strengths
of the MAS were offset by its
fees and by the fact that they
tended to store wheat too long.